The World Bank predicts that investment will grow in Yemen particularly as the new gas project awarded to the Yemen Gas Consortium (French, Japanese and U.S. companies) comes on stream. The proven natural gas reserves in the country are sufficient to produce and export 6.7 million metric tons of [LNG] per annum (mmtpa) for at least the next 20 years to its long-term international customers. Additional investments in the Marib Power Plant and Aden Free Zone will bring investment over the short term. Direct foreign investment in Yemen could surpass US$ 2 billion by 2020 and is likely to include a range of industries beyond natural resources as the country seeks out practically diversifying FDI.

Source: World Bank calculations

The Government continuous effort to improve Yemen economic performance has been paying off and several indicators point out towards overall progress:

Overall Economic Growth

Positive Forecasts:

Economist Intelligence Unit forecasts growth in real GDP, as well as in GDP per head by 2011. Moreover, real GDP growth per head is forecasted to be on the rise in 2010

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

GDP (Real Change Pa)

4.40

4.60

3.90

3.10

4.00

4.57

3.20

3.50

3.20

3.80

5.00

2.60

Nominal GDP (USS at PPP)

3.37

36.48

40.07

41.80

43.43

49.29

50,52

55.88

58.91

61.90

65.86

68.30

Real GDP

216,810,60

226,783,00

235,627,00

242,932,00

252,641,00

264,185,00

272,514,00

281,944,00

291,058,00

302,247,00

317,384,00

325,555,00

Source: Economist Intelligence Unit 2010

Non-Hydrocarbon Growth: According to the International Monetary Fund, Yemen recorded an average non-hydrocarbon growth rate of 5.5 percent per annum over 2004-2008, which was largely driven by agriculture, urban, services, and construction. Overall real GDP growth remains lower, averaging about 4 percent a year, due to the sharp contraction of oil output estimated at an average of about 6.5 percent per annum over the same period.

Composition of GDP, by Sector, 1991-2004

Share in GDP

1991-1995

1996-2000

2001-2004

GDP

100.00

100.00

100.00

Oil sector

12.8

16.0

14.5

Non-oil sector

87.2

84.0

85.5

Agriculture

23.9

22.3

21.1

Industry

14.5

14.5

13.9

Services

48.8

47.2

50.4

Source: Yemen Development Policy Review, World Bank 2006

Decreasing inflation: Inflation has been decreasing since 2006 when it reached 18.39% to 8.8% in 2009.

Year

2001

2002

2003

2004

2005

2006

2007

2008

2009

Inflation

11.9

12.2

10.8

12.5

11.4

18.39

12.6

10.7

8.8

Source: Central Bank of Yemen

Satisfactory External Position:

The Government has been maintaining a managed floating exchange rate system, and monetary policy has focused on exchange rate stability and control of excess liquidity in the banking system. The Rial has remained steady against the US$, which has helped mitigate inflation. In addition, gross official reserves are estimated to remain at the 2007 levels of around US$7billion in 2008, providing a substantial cushion of imports.

Trade:

Much in line with Yemen's GDP growth and foreign direct investment, bilateral and multilateral trade has, since 2000, been notably positive. Exports have more than doubled since 2001 and imports have more than tripled. Overall there is a clear trend over the years illustrating an increase in global trade, particularly with China, India and the UAE.

Top 10 Countries Exporting to Yemen in 2008

Top 10 Countries Importing from Yemen in 2008

Country

%

Value (US$ Million)

Country

%

Value (US$ Million)

U . A . E

28.9

3,032

CHINA

32.8

2,370

CHINA

6.98

732

THAILAND

25.11

1,815

SAUDI ARABIA

6.71

703

INDIA

8.34

602

KUWAIT

6.41

673

U . A . E

7.89

570

INDIA

3.92

411

SOUTH KOREA

6.61

477

U. S. A

3.85

403

SOUTH AFRICA

2.89

208

HOLLAND

3.84

402

KUWAIT

2.61

188

SWITZERLAND

3.34

350

SWITZERLAND

2.57

185

AUSTRALIA

2.78

291

SAUDI ARABIA

2.01

145

MALAYASIA

2.19

230

MALAYASIA

1.49

107

Source: Central Statistics Organization in Yemen

There's a clear trend over the years that shows an increase in Imports and Exports numbers with China, India and the UAE except in 2007 where China's Exports decrease.